Nifty makes triple digit gains; closes above 7800 level

The fifty stock index -- Nifty -- rose nearly 1.5% on Thursday, posting their biggest single-day percentage gain in nearly seven weeks, as investors opted to buy beaten down but fundamentally strong stocks, owing to strong global cues. Besides, the rupee recovered by 18 paise to 66.10 against the dollar on increased selling of the US currency by exporters and banks, also supporting the upside.  On the global front, all the Asian equities ended in green territory, tracking overnight gains on Wall Street post the US Fed minutes with major benchmarks such as Nikkei, Shanghai Composite, Hang Seng and Straits Times ending with gain of over a percent. European equities also opened in green, shrugging off security concerns in France, as FTSE 100, CAC 40, DAX, all climbed up by 1 percent.

Back home, after getting a gap up start, Indian benchmark Nifty extended its gain and extended its northward journey through the session and ended near its crucial 7850 mark, with the gain of 110 points. Investors around the world remained optimistic on expectations the U.S. Federal Reserve indicated the world’s largest economy looks healthy enough to withstand a modest rise in borrowing rates. On the domestic front, sentiments remained upbeat by seeing the government going overdrive announcing various decisions including cabinet nod for 10 percent stake sale in Coal India, IPO of Cochin Shipyards, and clearance of 3% interest subsidy for exports. CCEA also empowered the National Highways Authority of India (NHAI) to revive 34 stalled projects. Direct subsidy to farmers for sugarcane sold to sugar mill was among the sweeteners announced that supported the markets. Some support also came with Chief Economic Adviser Arvind Subramanian’s statement that Inflation is completely under control and it is well within the target of the Reserve Bank. Meanwhile, Oil and gas stocks attracted investor attention after the Union Cabinet approved a marketing margin of Rs 150-200 a standard cubic meter (scm) to be charged by natural gas retailers such as Reliance Industries and GAIL from urea and for liquefied petroleum gas (LPG) plants. Also, shares of railway-related companies traded higher after the government approved Rs 8,349 crore investments on rail freight lines in three states.

The top gainers from the F&O segment were Engineers India, Arvind and Century Textiles & Industries. On the other hand, the top losers were DLF, MindTree and Petronet LNG. In the index options segment, maximum OI was being seen in the 7900-8300 calls and 7500-7900 puts. In today's session, while the traders preferred to exit 7800 put, heavy buildup was seen in the 7500 put. On the other hand, traders exited from 8100 Call, while 7800 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 9.04% and reached 15.84. The 50-share Nifty was up by 110.95 points or 1.43% to settle at 7,842.75. 

Nifty November 2015 futures closed at 7858.35 on Thursday at a premium of 15.60 points over spot closing of 7,842.75, while Nifty December 2015 futures ended at 7895.70 at a premium of 52.95 points over spot closing. Nifty November futures saw contraction of 0.96 million (mn) units, taking the total outstanding open interest (OI) to 16.67 million (mn) units. The near month derivatives contract will expire on November 26, 2015.  

From the most active contracts, SBI November 2015 futures traded at a premium of 0.25 points at 244.50 compared with spot closing of 244.25. The number of contracts traded were 12,151.      

ICICI Bank November 2015 futures traded at a premium of 0.20 points at 266.15 compared with spot closing of 265.95. The number of contracts traded were 12,140.          

Axis Bank November 2015 futures traded at a premium of 1.60 points at 464.60 compared with spot closing of 463.00. The number of contracts traded were 11,369.    

Reliance November 2015 futures traded at a premium of 4.05 points at 937.60 compared with spot closing of 933.55. The number of contracts traded were 11,718.        

Infosys November 2015 futures traded at a premium of 0.30 points at 1048.30 compared with spot closing of 1,048.00. The number of contracts traded were 10,678.       

Among Nifty calls, 7900 SP from the November month expiry was the most active call with a contraction of 0.98 million open interests.  Among Nifty puts, 7800 SP from the November month expiry was the most active put with an addition of 1.46million open interests. The maximum OI outstanding for Calls was at 8000 SP (6.36 mn) and that for Puts was at 7700 SP (6.13 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7876.62--- Pivot Point 7821.03--- Support --- 7787.17.

The Nifty Put Call Ratio (PCR) finally stood at 0.81 for November month contract.  The top five scrips with highest PCR on OI were STAR (1.76), Titan Company (1.49), Bank of Baroda (1.20), BEML (1.18) and Hexaware (1.17).   

Among most active underlying, Dr. Reddy's Laboratories witnessed a contraction of 0.01 million of Open Interest in the November month futures contract, followed by Maruti Suzuki India witnessing a contraction of 0.14 million of Open Interest in the November month contract; Infosys witnessed a contraction of 0.66 million of Open Interest in the November month contract, State Bank of India witnessed a contraction of 1.18 million of Open Interest in the November month contract and Reliance Industries witnessed a contraction of 0.16 million units of Open Interest in the November month's future contract.